“Spending Diet or Spending Fast”- Either way a new concept to cut down your debt fast!

“Spending Diet or Spending Fast”- Either way a new concept to cut down your debt fast!

This is fairly a new concept applied by Anna Newells, a Denver-based blogger who paid off $23,605.10 of her student-loan and credit-card debt through this process within a couple of months. Sounds relatively unreal, but it can be achievable as long as you can differentiate your needs vs. wants.

Source

A real life experience of Anna Newells.
According to her,

“With the spending fast, I had no discretionary income."  This meant she would spend the money only on essential needs such as rent or mortgage payment, utility bills, groceries, transportation or vehicle costs.  If it was not absolutely necessary -- then she did not get it!   Clothes, coffees, dining out, movies -- forget it!  She did not get it!  Nothing!  Nada!

 With the spending diet, however, she gave herself a $100 non-need allowance per month, and would spend that on whatever she wanted. BUT the spending diet was way harder than the spending fast, she claimed. “Because with the spending diet, I would try to spend normally -- and then I would overspend!”

How can you apply these programs?

Let me give you an example. Your daily coffee from that high-end cafe is not an essential purchase. Seriously, ask yourself, do you really need to spend $5 to wake up every morning?  Instead, try making yourself a cup of green tea or black coffee or anything that suits your taste.

Always remember that your spending needs should only include necessary or must expenditures such as rent or mortgage payments, transport costs, groceries and emergencies. Always make sure you ask yourself, “Is this absolutely essential?” If it’s not, than you cannot spend money on it!  This takes discipline. Lots of it. Without discipline, you will never last in this program.  But if you do, the rewards -- paying off your debts - are huge!

Anna Newells’ tactics may sound too harsh for most us.  So here is one alternative version of spending diet program.

Give yourself a budget cap combining all of your essentials and non-essentials. This could be your monthly or weekly allowance depending on your pay day structure. You must survive within the budget that you give yourself every time. It is wise to start with the usual amount that you spend every week or month and then start to cut down a little portion from that budget as you progress.

For more money saving tips and financial advice visit www.prudentfinancial.net

Where to save money and start paying off your debts first?

When repaying your debt, first start with your credit cards and say no to minimum monthly payments. Then follow up with your car loans, personal loans and other kinds of debt.

Also, don’t forget to reward yourself after achieving your monthly financial goal, but remember the reward level must stay within your spending limit!

Overdue debts can lead to bad credit rating which will result having poor credit score, minimizing your debt will not only improve your financial condition but also your personal and family life.

LOTS OF LUCK!

Let us know if these methods can be helpful to manage your finance better. Are they practical? Are they durable?

 

 

 

Clean up Your Debt by Consolidating it all For the New Year!

Consolidating all of your current debt will make a difference to you and your family in saving and planning for the future. Since the Bank of Canada has decided not to increase prime interest rates, now is a great time to take advantage of low lending rates. This means the lending rates will remain the same for the foreseeable future. The average family owes $150.00 dollars for every $100.00 they earn. How badly are you relying on credit to keep you going? Here are a few reasons why debt consolidation may be one solution for you.

Why should I consolidate my debt?

• By paying off all of your higher interest credit cards in full you will save the difference in interest. Pay all of your Store Credit cards, for example Sears, The Bay and Canadian Tire not just Visa MC and AMX.

• Your banking overdraft fees, interest and monthly surcharges will no longer be added to your current statement. No more penalties in late fee’s and account charges.

• Pay your balance and outstanding amount for your cable, Internet & phone (are you in a contract, If not shop around for better prices).

• Eliminate your stress of collection calls.

• Essentially get a loan for all debt that you owe, roll it into one monthly payment and make sure the interest charged is less than your previous combined interest charges.

Where to look for a consolidation loan.

There are other options to traditional banks' consolidation. Some are credit unions, trust companies and private financial services that provide affordable open vehicle title loans and home equity loans to people with bad credit.

How will this help you and your family?

• By consolidating all of what you owe into one payment you will only be making one payment instead of juggling money from one account to the next.

• The consolidation loan will usually be at an interest level less than the interest rate your credit cards were at. Saving you money.

• Preserving you credit rating by paying off all outstanding debt will look great on your credit report. One monthly payment will generate positive credit history moving forward into the New Year.

• Trying to keep on top of each individual account, card, amount past due is time consuming and stressful.

Making resolutions for the New Year with a clean start will enable you to keep your promises. Consolidating your past financial debt into one affordable payment, lessening your over all interest and expenses is the perfect way to kick off the New Year.

Once you have made a fresh start you are now able to continue in the correct direction. You will start to climb out of debt, create good credit history and most importantly become less stressed by sticking to a budget you can afford. You may now start to, take back control of your debt and are on your way to remaining debt free!

For more valuable information about how to manage money, please visit www.prudentcreditrepair.ca